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Seven in 10 advertisers and agencies responsible for media buying for mobile advertising report spending more on mobile ad spending this year than last, according to a commissioned study [download page] conducted by Forrester Consulting on behalf of AppsFlyer. But while budgets are growing as advertisers seek to grow their sales through mobile channels, several challenges are standing in their way.

Among the 250 respondents, whose companies spend at least $1 million a month on digital advertising, 40% said that lack of visibility into the data used to define audiences for targeting is a top challenge preventing them from meeting their mobile advertising goals. Lack of inventory transparency (33%) and mobile fraud (32%) also were among the key challenges cited.

Keying on fraud, fully 92% of respondents said that mobile ad fraud prevention will be a critical (44%) or high (48%) priority in the coming 12 months. That’s understandable given that 43% of respondents feel that the amount of fraud they’re subject to has increased over the past year.

In fact, most respondents estimate that more than 30% of their mobile web and in-app advertising budgets are subject to fraud.

Separate research from Advertiser Perceptions indicates that roughly half of digital advertisers in the US (not just mobile advertisers) believe that at least 10% of their spend is lost to fraud. That’s at best an estimate, though, as only about 1 in 10 have undergone specific research and audits to arrive at their figure.

Likewise, only 19% of respondents to the AppsFlyer and Forrester Consulting report indicate that they have the tools and systems in place to systematically monitor and prevent mobile ad fraud.

Among those having limited success with detecting and preventing ad fraud, the major reasons given were a lack of understanding about all the types of fraud that exist, and a lack of understanding as to the types of solutions that exist.

As for the types of mobile ad fraud that exist, respondents are most familiar with:

  • Click fraud, such as forced clicks, click redirection, mislabeled impressions, and bot clicks (42%);
  • Fraudulent traffic (38%); and
  • Fake installs (33%).

By comparison, advertisers are less aware of click flooding or click spam (18%), install farms (15%), and mobile emulators (9%).

The most common actions taken to respond to mobile ad fraud concerns are to assign fraud-related KPIs to media buying agencies and ad networks (53%), to use data and analytics tools to understand and measure suspicious patterns for mobile ad fraud (48%), and third-party traffic validation technology (43%).

Only 6% have not responded yet in any way.

The full report – which includes key recommendations from the analysts – can be downloaded here.

About the Data: The results are based on a survey of 250 advertisers and agencies responsible for media buying for mobile advertising France, Germany, UK and the US. Survey participants included decision-makers in media buying for mobile advertising, and come from companies spending at least $1 million per month on digital advertising.

Some 64% of respondents are based in the US. All are from companies with at least 500 employees, including 74% from companies with more than 1,000 employees.

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